Quant part - LOS 11.j: Identify the appropriate test statistic etc. Chi-Square Test

CFA Level I
#1

Hi everyone,

I have a question regarding a LOS in the chapter 11 from the quantitative part.

“LOS 11.j: Identify the appropriate test statistic and interpret the results for a hypothesis test concerning 1) the variance of a normally distributed population, and 2) the equality of the variances of two normally distributed populations based on two independent random samples.”

I am using Schweser notes and it is always precised that when the LOS states “identify” and not “calculate”, we do not have to know the formula (but to understand the concept, of course). Therefore, I did not pay a lot of attention to know by heart the Chi-Square Test formula which is in this LOS 11.j.

However, as I am doing concept checker at this end of this chapter, I notice that it requires to know this formula and I wanted to know what we are supposed to do? Just understand the concept like it is mentioned in Schweser for such LOS or know by heart this formula of Chi-Square Test?

Thank you in advance.

#2

“Identify” means to correctly select the test you must use at a certain case, it does not mean not to apply the formula of the test selected. Moreover, the LOS states to interpret the results, so you think all the calculations will be given? This should tell you something…

Test statistics are easy to memorize, just practice them.

#3

Hi Harrogath

Thank you for your reply.

Look what Schweser noted in this chapter “Professor’s Note: The LOS here say “Identify the appropriate test statistic and interpret the results…” I can’t believe candidates are expected to memorize these formulas (or that you would be a better analyst if you did).”… (p. 332 quanti. section)

This is why I am asking

#4

Moreover, this formula is not in the formula sheet from schweser

#5

The professor’s Note you mean is for LOS 11.i not for 11.j

LOS 11.i is kinda complicated because those t-tests are used for certain kind of hypthesis (mean differences). I personally believe that those t-tests have a very low probability to be asked by memory on the exam, and the professor’s note states the same, thats all.

But all the other test statistics like Chi-square, F, and T must be memorized, just do it, they are not much complicated. In L2 you will need them, so do not try to skip this.

Good Luck !

#6

Yes it is indeed not for 11.j but the LOS is the “same” in some way. I do not mind to learn them, but I then do not understand the logic of these LOS.

Thanks for your response

#7

Learn them all :smiley:

I’m serious. The chi, F and T are really necessary. Do it now or when you stay in L2, but, believe me, when you be there you will regret.